Unfortunately for the Republican tax cutters who used to be deficit hawks, we already have real-world historical evidence of what happens after massive tax cuts. Ronald Reagan and George W. Bush both cut taxes on the wealthy and ended up with huge budget deficits.
Besides, there's no reason to cut taxes on big corporations and the wealthy. If anything, their taxes should be raised.
Trump says we're "the highest taxed nation in the world." Rubbish. The most meaningful measure is taxes paid as a percentage of GDP. On this score, the United States has the 4th lowest taxes of any major economy. (Only South Korea, Chile, and Mexico rank lower.)
American corporations aren't overtaxed. After taking deductions and tax credits, the typical U.S. corporation today pays an effective tax rate of 24 percent. That's only a tad higher than the average of 21 percent among advanced nations.
The rich aren't overtaxed. The wealthiest 1 percent in the U.S. pay the lowest taxes as a percent of their income and total wealth of the top 1 percent in any major country -- and far lower than they paid in the U.S. during the first three decades after World War II, when the American economy grew faster than it's been growing since the Reagan tax cuts.
But we do have a deficit in public investment -- especially in education and infrastructure. And we do have a national debt that topped $20 trillion this year and is expected to grow by an additional $10 trillion over the next decade.
What's the answer? Raise taxes on big corporations and the wealthy. That's what rational politicians would do if they weren't in the pockets of big corporations and the wealthy.
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